FX levels to watch – EUR/USD, GBP/USD and USD/JPY

The dollar has regained ground in the wake of Jerome Powell’s testimony to congress. However, with key levels intact, we need to see EUR/USD, GBP/USD and USD/JPY break support/resistance to signal a medium-term trend shift.

EUR/USD at crucial double top neckline

Representing the neckline of a double top formation, EUR/USD is trading at the crucial $1.2205 swing low.

This will be a crucial level for today’s trade, with an hourly or four-hour close below this level providing a bearish outlook going forward. As such, watch for a break below or reversal higher from here.

EUR/USD chart

GBP/USD heads back into 76.4% support once more

GBP/USD is turning lower into the 76.4% retracement again this morning, following two failed attempts to break below that level over recent days.

This could be the source of another push higher. However, with a lower high formed last Friday, there is a chance that we could bring a more bearish medium-term picture, with a break below $1.3764. As such, watch for a reaction at this 76.4% retracement ($1.3855), where a break lower could point towards the beginning of another period of weakness for the pair.

GBP/USD chart

USD/JPY rallies, yet can it break above key resistance

USD/JPY is attempting to regain ground, as it seeks to reverse much of the losses seen earlier this month.

The downtrend is clearly established over recent months, and this means that the preference is to sell into this pair, unless the price action tells us otherwise. On this occasion, a break above ¥107.90 would negate the bearish outlook, setting a higher high and higher low. With the price having rallied into the 76.4%, there is a chance we could see a move lower from here. A break back through ¥107.90 would be the signal to negate that bearish view.

USD/JPY chart

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